Why Flexible Work Means Flexible Pay
The business world around all of us is changing, and it’s clear that agility and flexibility are the keys to future success in almost every area. The COVID-19 pandemic forced many companies into adopting practices like remote and hybrid working, and supported by technology, many businesses have found upsides that they can benefit from for years to come.Similarly, employees have found positives from flexibility, in terms of how, where and when they work, and how this improves their overall work/life balance. But that flexibility isn’t necessarily being reflected in how they’re paid. This blog investigates why flexible work should mean flexible pay, and how Earned Wage Access is the most practical solution for employees and employers alike.
Changing Employee Perceptions
Over the course of the pandemic, there was a worry that long-term remote working may negatively impact both people and businesses. There were worries that employees would miss the interaction and easy collaboration with their co-workers, that their mental health would be impacted, and that businesses would find it more difficult to operate normally.
Of course, every business is different, but it seems that the positives of home working - no commute, home-made lunches, better family time, better work/life balance - outweigh the negatives. Research by The Grossman Group into U.S. employees working from home during the pandemic found 48% want to keep it that way. The same research also found that 88% feel just as satisfied or more satisfied with their employer, and 80% say their supervisors are communicating everything they need to do their jobs.
So it’s clear that the future lives of many employees will be far more flexible than they were pre-pandemic. Out go rigid nine-to-fives and commuting times; in come working anywhere with an Internet connection (within reason), and fitting work around personal commitments like childcare, medical appointments and so on. But this change in lifestyle will change the demands on people’s finances, which means that the traditional payroll approach of a lump sum paid on a fixed date every month may no longer be suitable or practical.
The Answer: Earned Wage Access
The solution is to give employees equal flexibility in how they work and how they get paid. Allowing them to draw down their pay any time they want, and without having to deal with payroll staff to do it. This is called Earned Wage Access (EWA).
Under EWA, employees can use a cloud-based money movement solution, either online or through a mobile app, which would act like a bank account for their wages. After each day or shift they work, the amount in the account increases by however much they have earned. The employee can then log in to check the balance, and withdraw however much money they wish to their personal bank account straight away.
This puts employees in full control of their pay and allows them to constantly adapt how and when they’re paid to meet changing personal circumstances.
Financial Management Made Easy
Much like they already have with flexible working, once employees start using an EWA solution, the benefits of doing so will quickly begin to permeate through their life away from work:
In the event of an unexpected expense (e.g. urgent repairs to the home or to a car), an employee can instantly access the funds that they need, without turning to credit cards or payday lending that would generate additional debt through interest and charges.
By smoothing out the earning process, employees can better budget for their regular fixed costs, and break the cycle of spending big on payday and struggling towards the end of each month.
By seeing their wage balance rise every time they complete a day or a shift, employees can feel more motivated, especially if they’re saving up for a holiday or other treat. This can have a positive effect on their productivity and reduce absenteeism.
EWA is the payroll model that can underpin the flexible, agile lifestyle that so many employees are looking for. Not only will it help them exert better control over their finances, but employers will also benefit from a motivated workforce, and a key innovation that can help them attract better candidates in a competitive job market.
In such a fast-changing business landscape, there really is no time to lose in evaluating an EWA solution for your organization if you haven’t done so already,
CloudPay’s global payroll solution is trusted by international businesses the world over to make payroll simpler, faster and more data-driven in every corner of the planet. Take a closer look at our technology here.